How to Compare Apples to Oranges: Balancing Internal Candidates’ Job-performance Data with External Candidates’ Selection-test Results

Abstract

[Excerpt] While the human-resources issues of concern to the hospitality industry are broad and complex, this paper focuses on the staffing decision that must be made when managers consider whether to hire an external candidate or make an internal transfer. This is a particularly tricky problem, because decision makers must compare one type of information on internal candidates (e.g., job-performance data) to other types of information collected on external candidates (e.g., interview results, test scores). Essentially, the person doing the selection and hiring must compare apples to oranges to make a decision. The paper argues that in such cases hiring decisions should be made to maximize the predicted performance of the new hire. The goal of the paper is to provide an estimate of the ability of past performance to predict future performance, so that such ratings can be compared meaningfully against external candidates or other internal candidates. Ultimately, the paper shows how different past-performance data can be compared against data on external candidates to help make hiring decisions.